The correct answer is (c) 32.0%.
The Thirteenth Finance Commission (TFC) was constituted by the President of India on 29 December 2004 to recommend the principles governing the sharing of central taxes between the Centre and the States for the period 2005-10. The TFC submitted its report on 14 December 2005.
One of the key recommendations of the TFC was that the share of central taxes to be allocated to the States should be increased from 29.5% to 32.0%. This recommendation was accepted by the Central Government and implemented from 1 April 2006.
The TFC also recommended that the share of central taxes to be allocated to the States should be based on a formula that takes into account the following factors:
- Population
- Area
- Income
- Fiscal capacity
- Tax effort
The TFC’s recommendations have had a significant impact on the finances of the States. The increase in the share of central taxes has helped the States to improve their fiscal position and to provide better services to their citizens.
The following are the brief descriptions of each option:
- Option (a): 30.5%. This was the share of central taxes that was allocated to the States for the period 2000-05.
- Option (b): 31.0%. This was the share of central taxes that was recommended by the Twelfth Finance Commission for the period 2005-10.
- Option (c): 32.0%. This is the share of central taxes that has been recommended by the Thirteenth Finance Commission for the period 2005-10.
- Option (d): 32.5%. This is the share of central taxes that was recommended by the Fourteenth Finance Commission for the period 2010-15.